Like the fast cars he loves to drive,
James Fazzino
is in a hurry to capitalise on
Incitec Pivot
’s growing exposure to the explosives business as it increasingly shifts its focus away from its more volatile fertiliser operations.

With Moranbah, the sixth ammonia plant in the Incitec group, open for business the company has laid the groundwork for growth this year.

It is no accident Dyno Nobel now contributes 60 per cent of the company’s earnings. Like rival
Orica
, Incitec Pivot’s explosives business has enjoyed year-on-year earnings growth for an operation leveraged to the developing world’s ongoing demand for commodities.

The company’s 10 per cent rise in full-year earnings, reassuring outlook and a better-than-expected dividend was enough to recover yesterday’s share price decline because of new problems with its Mount Isa sulphuric acid plant.

Fazzino is treading carefully, however. The chief executive likes to talk about low-risk sources of cashflow and the company’s strict financial metrics for investing in new projects.

Incitec has deferred a feasibility study on an ammonium nitrate project at Newcastle in NSW, next door to Orica’s controversial plant which is now slated for expansion. The other key battle ground is in the Pilbara where Orica plans to start building an ammonium nitrate plant on the Burrup Peninsula next year.

Orica has made it difficult for Incitec to break into that market, but it has other options.

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All bets are on Incitec going ahead with an ammonia plant in Louisiana. A final investment decision is expected next year. The attraction is the US’s lower cost base compared with the Pilbara, which is one of the most expensive places in the world to operate a business.

Fazzino also confirmed he was talking to the Opposition and state governments in Queensland and New South Wales about having a separate domestic and LNG price for gas, something the government rejected in its energy white paper.

“Australia can have its cake and eat it too. It can have a vibrant downstream industry which adds value to our gas, and LNG exports," he said.

The chief executive was tight-lipped on any merger and acquisition activity today. He wasn’t going near speculation that it might take a look at
Elders
’s rural services arm

Despite the issues with fertilisers, which includes the higher Australian dollar, Fazzino isn’t interested in separating the explosives and fertilisers business for now.

Incitec was spun off from Orica in 2006 to become a pure-play fertiliser operation, but two years later acquired Dyno Nobel to make it the world’s second-biggest mining explosives maker.